Bleak winter for Britain's high-street retailers
AFPLONDON -- Four big British high-street retailers had to call in administrators this winter as cash-strapped, Web-literate consumers proved unforgiving of stores failing to adapt to fast-evolving markets.
January 21, 2013, 12:13 am TWN
DVD rental chain Blockbuster became the latest casualty Wednesday, with its British arm entering administration — in which a troubled firm brings in independent financial help in a bid to stay operational — a day after music chain HMV made the same move.
Camera chain Jessops went into administration on Jan. 9 and closed its 187 shops shortly after, while electrical firm Comet shut its 235 stores in December. The failures have cost Britain 9,025 jobs, with another 7,780 in the balance.
Bryan Roberts, director of retail insights at analysts Kantar, said this was part of a trend that began with the 2008 financial crisis.
“We've been through such a brutally Darwinistic few years, in which all the runts of the litter have been picked off,” he said.
Britain's still-struggling economy, which climbed out of double-dip recession in the third quarter of 2012, faces at best sluggish growth this year.
Retailers meanwhile face stiff competition from supermarkets and online sales, especially in entertainment, where downloads and streaming are eroding markets for physical products.
HMV, Britain's last nationwide music store chain, failed to produce a strong online offering early enough to combat Amazon and Apple's iTunes, Roberts said.
“Management in the late 90s was very dismissive of the threat and the opportunity of online,” he said.
Later, the store tried to diversify into areas including consumer technology, live music and accessories, but this “diluted their authority,” Roberts added.
“If you were a consumer who had music tastes beyond the mainstream you were very badly served by HMV.”
Blockbuster was late to grasp the threat posed by online services such as Netflix and Lovefilm, which offer films and television programs for download, while Jessops fell prey to digital photo processing and phone cameras.
Matt Piner, research director at consultants Conlumino, said store chains needed to focus on multi-channel, “bricks and clicks” retailing along with distinctive product ranges.